CLICK HERE to watch BCREA Chief Economist Brendon Ogmundson discuss the February 2020 statistics
Download the full report by BCREA's Economics Market Intelligence: Sketching Out the Potential Impact of COVID-19 on the BC Housing Market March 17, 2020. Click HERE
Overall Summary Findings:
While it's unknown how the unfolding COVID-19 outbreak will impact the economy in the long-term, BC is facing a sudden stop in economic activity with little guidance to when things may return to normal.
Based on our scenario analysis, BC home sales and prices will likely face declines in the spring and early summer but should recover along with the wider economy in the second half of the year, contingent on the outbreak resolving.
The postponed change to the mortgage stress test rate, originally slated for April 6, 2020, will mute the impact of falling interest rates for the BC housing market.
Whistler discussion with Brendon Ogmundson.
(Denise) As mentioned in the last point above, you state that the postponed change to the mortgage stress test being delayed will mute the impact of the falling interest rates of the BC Housing market. I understand that those applying for mortgages with less than 20% down, most commonly have insured mortgages and are impacted by the stress test, however, the stress applies to buyers who are purchasing property under $999,000. The majority of sales in Whistler have been over $1M since 2017 as well as average sale price over $1.2M for the same period. I am sure Greater Vancouver is the same, but not all of BC which is what I believe your housing market report refers to.
For real estate markets in BC that are primarily over $1M, do you believe the same ie that the mortgage stress test delay will mute the impact or is it less relevant? In the past, Whistler has managed to balance itself out fairly well, having 10 year cycles mostly and being dramatically affected when there has been a global crisis. All in all going up. Upon review of the market, we have seen a softening of prices in certain price ranges and extended days on the market since winter 2018 however visitors continued to come into the Whistler and overall Resort values & wealth have continued to increase. And now the 10th year crisis.
With our primary market being over $1.2M are your thoughts the same for the Whistler real estate market as you have expressed in your report? We do know changing seasons usually bring increased optimism; a different demographic and a buyer seeking slightly different product. Our winter guests have returned home and some may continue to think of purchasing or selling a Whistler home as they are less affected. For example, after the 2008 stock market crisis and during the recovery periods thereafter we still saw those in the medical fields and finance investing in recreational property and upgrading into larger homes.
(Brian Ogmundson)"The change to the stress test for insured mortgages was expected to be followed by a change for B20 rules for uninsured mortgages as well (that is everyone, including those with a 20% downpayment, were going to undergo a similar stress test without the purchase price limit). As our analysis included all BC Housing markets (all price ranges) we grouped the insured and uninsured information together.
I think you are right that the impact may be less for the $1M price and over markets. There will be many buyers who can easily qualify at the higher posted rate and who will jump at the chance to get a historically low mortgage rate (which we expect will be around for the rest of the year at least). But it may take some time before the uncertainty of the current moment passes. Our most likely scenario is for the economy to be very slow over the next few months but then rebound due to pent-up demand. That’s why in most scenarios, we anticipate a stronger second half of the year."
thank you to Brian Ogmundson & the BCREA Economists
(Information is discussion only and all buyers and sellers should seek independent legal advice) E&OE